own about their prevalence and the extent to which their designs adequately reect
and support consumerism.
Objective. We examined three types of consumer-directed health plans: health
reimbursement accounts (HRAs), premium-tiered, and point-of-care tiered benet
plans. We sought to measure the extent to which these plans had diffused, as well as to
provide a critical look at the ways in which these plans support consumerism.
Consumerism in this context refers to efforts to enable informed consumer choice and
consumers involvement in managing their health. We also wished to determine
whether mainstream health planshealth maintenance organization (HMO), point
of service (POS), and preferred provider organization (PPO) modelswere being
inuenced by consumerism.
Data Sources/Study Setting. Our study uses national survey data collected by
Mercer Human Resource Consulting from 680 national and regional commercial health
benet plans on HMO, PPO, POS, and consumer-directed products.
Study Design. We dened consumer-directed products as health benet plans
that provided (1) consumer incentives to select more economical health care
options, including self-care and no care, and (2) information and support to inform
such selections. We asked health plans that offered consumer-directed products about
2003 enrollment, basic design features, and the availability of decision support.
We also asked mainstream health plans about their activities that supported
consumerism (e.g., proactive outreach to inform or inuence enrollee behavior, such
as self-management or preventive care, reminders sent to patients with identied
medical conditions.)
Data Collection/Extraction Methods. We analyzed survey responses for all four
product lines in order to identify those plans that offer health reimbursement accounts
(HRAs), premium-tiered, or point-of-care tiered models as well as efforts of mainstream
health plans to engage informed consumer decision making.
Principal Findings. The majority of enrollees in consumer-directed health plans are
in tiered models (primarily point-of-care tiered networks) rather than HRAs. Tiers are
predominantly determined based on both cost and quality criteria. Enrollment in HRAs
1055 has grown substantially, in part because of the entry of mainstream managed care plans
into the consumer-directed market. Health reimbursement accounts, tiered networks,
and traditional managed care plans vary in their capacity to support consumers in
managing their health risks and selection of provider and treatment options, with HRAs
providing the most and mainstream plans the least.
Conclusions. While enrollment in consumer-directed health plans continues to grow
steadily, it remains a tiny fraction of all employer-sponsored coverage. Decision support
in these plans, a critical link to help consumers make more informed choices, is also still
limited. This lack may be of concern in light of the fact that only a minority of such plans
report that they monitor claims to protect against underuse. Tiered benet models
appear to be more readily accepted by the market than HRAs. If they are to succeed in
optimizing consumers utility from health benet spending, careful attention needs to be
paid to how well these models inform consumers about the consequences of their
selections.
Key Words. Consumer-directed health plans, health reimbursement accounts,
consumerism, tiered networks
Accelerating growth in health insurance premiums coupled with an economic
downturn have generated a renewed focus on cost control in the U.S. health
benets sector. The prevailing vision for cost control in the current employer-
sponsored health benet market does not, however, call for increasingly
restrictive managed care plans (Galvin and Milstein 2002). Desire for broad
choice and rejection of explicit rationing is widespread, a phenomenon that
was in part responsible for the managed care backlash. More than 40 percent
of adults target='blank' class='doin' >surveyed nationally do not support any restriction on choices of
physicians, hospitals, or treatment options (Employee Benet Research
Institute 2003) even if such restrictions would result in lower health care costs.
A number of employers and health insurers have embraced new health
benet models with increased consumer incentives to select options that
reduce health plan spending and possibly also to select higher-quality options,
accompanied by more exibility with regard to provider and treatment
choices. Incentives may encourage more economical or higher-quality
selections in all health care decisions or may target only a subset. The
primary stimulus of this so-called consumer-directed health benets move-
Address correspondence to Meredith Rosenthal, Ph.D., Assistant Professor, Department of Health
Policy and Management, Harvard School of Public Health, 677 Huntington Ave., Boston, MA
02115. Arnold Milstein, M.D., M.P.H., is with Mercer Human Resource Consulting, San
Francisco.
1056
HSR: Health Services Research
39:4, Part II
(
August 2004
) ment has clearly been provided by the perceived need to reduce spending, but
its stated goals also include enhancing quality or the ratio of health gain to
health insurance spending (value). Sponsors of consumer-directed health
benets often suggest that enabling consumerism in health care is the
primary objective of these new plans. Critics, however, worry that consumer-
directed health plans merely shift more costs onto all consumers or to sicker
consumers without conferring upon them the necessary tools to select higher
value health care options.
Aside from nancial incentives for consumers to select lower-cost and
possibly higher-quality options, consumerism frequently incorporates two
additional concepts: (1) informed choice and (2) active consumer participation
in managing health and health care decision making (the consumer as
coproducer of health as described in the literature) (Hibbard 2003).
Informed choice of health plans on the basis of reported clinical quality and
patient experience has been the primary emphasis of efforts to leverage
consumer involvement to improve health care quality over the past several
decades. Newer models more heavily emphasize informed selection of
provider options. The typical assumption of consumer choice models is that
consumers will not only select better (e.g., higher-quality) options resulting in
better cost or quality outcomes in the short run but also that health plans,
physicians, and hospitals will thereby be encouraged to compete on the basis
of the performance measures that are reported. While health plan and
provider report cards have met with relatively disappointing results to date
(Scanlon et al. 1998; Schneider and Epstein 1998; Hibbard and Peters 2003),
there have been improvements in both measurements and their communica-
tion to consumers.
Engagement of consumers in managing their own health risks and
making informed decisions about treatment options (including not seeking
treatment) builds on preexisting managed care methods; these include health
risk assessments, information about self-care and management of chronic
conditions, information and patient reminders about preventive health
measures, nurse-staffed telephone help lines, and shared decision-making
programs (Hibbard 2003). A growing literature documents the effectiveness of
these methods, such as reminders and self-care education for improving health
outcomes for individuals with diabetes, asthma, and depression (von Korff
et al. 1997; Clark 2003).
At the present, the extent of these changes in health benet plans are
unknown, despite the abundance of articles on their policy and business
implications (Fronstin 2002; Robinson 2002). The only published empirical
Awakening Consumer Stewardship of Health Benets
1057 analysis of this emerging trend found that, while growing, consumer-directed
health plan enrollment remained low in 2002. The study, which relied on key
informant interviews, reported a high degree of variation around plan models
and features among the class of plans considered to be consumer-directed.
It also suggested that large national and regional health plans were beginning
to view consumer-directed models as strategically important products, which
might consequently lead to wider diffusion in 2003 and beyond (Gabel,
LoSasso, and Rice 2002). In addition to assessing the current prevalence of
new models, a key puzzle to unravel is whether consumer-directed health
plans provide the necessary tools to engage consumers in choosing and
participating in managing their own health.
We sought to update and broaden previous research through a national
health plan survey in the rst quarter of 2003. Our research examines two
broad categories of consumer-directed health plans: (1) health reimbursement
account models, and (2) tiered benet models. Our principal goal was to
measure the uptake of these consumer-directed products and examine the
extent to which they actively support consumerism. For comparison, we also
wanted to gauge the extent to which mainstream health plans are in-
corporating incentives to select more economical health care options and
providing information to support those selections (decision support). To this
end, we examined the prevalence of such incentives and decision-support
strategies among mainstream health plansspecically, health maintenance
organization (HMO), point of service (POS), and preferred provider
organization (PPO) plans.
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IRECTED
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Most of the press and policy dis